Questions about IVAs?

Individual Voluntary Arrangements (IVAs) were first introduced by the government to help people avoid going into bankruptcy. Depending on your circumstances creditors can agree to write off as much as 75% of your total debt, although this is only in extreme cases. If you’re considering an IVA and have lots of questions, we’ve answered the ones most frequently asked below.

If you have any more questions, or would like answers specific to your own situation, then do contact us and we’ll be happy to help. Our friendly team of experts can give you all the information you need, and provide you with clear, honest and impartial advice.

What is an Individual Voluntary Arrangement (IVA)? What is an Individual Voluntary Arrangement (IVA)? An IVA is an agreement between you and your creditors, with flexible terms. Typically, you pay an agreed monthly sum for up to five years. This is then divided between your creditors, who accept the sum in full and final settlement of the amount you owe. You pay a percentage in the pound to your creditors – the remaining balance is written off.

How much will I need to pay? How much will I need to pay? The monthly payment agreed with your creditors depends on your income and expenditure – it is made affordable to you, and is usually paid by standing order.

Do I get to keep my house? Do I get to keep my house? Yes – it is extremely unlikely you will have to sell your house as part of an IVA. You will however, need to release any spare equity if your creditors think it necessary. One of the main advantages of an IVA though, is that you do get to keep your house.

What are the advantages of an IVA? What are the advantages of an IVA? Regarded by many as the most positive way out of debt, there are lots of advantages to an IVA: ¤ you make only one affordable payment each month, and that payment doesn’t vary unless your circumstances change and you can afford more ¤ all of your creditors are legally bound by its terms, as long as you keep paying the agreed monthly sum ¤ you have no further obligations to your creditors once your IVA comes to an end, which is usually after five years. At this point you stop paying the monthly sum and your debts are effectively written off. You are completely debt free ¤ your employer will not know about your IVA unless you choose to tell them ¤ unlike bankruptcy, an IVA is not advertised in the local press and will not prevent you from running a business or working in certain professions.

How long does an IVA last? How long does an IVA last? A typical IVA runs for five years, although a lump sum IVA can run for considerably less time. At the end of this period, if you have kept up your monthly payments, you’ll have nothing further to pay and your creditors write off any remaining debt.

Are there any other options? Are there any other options? Depending on your personal circumstances there are several alternatives to an IVA, the main options being Debt Consolidation, Remortgaging, a Debt Management Plan, or even Bankruptcy. Each of these have their various merits, but for more information or a comparison between them, take a look at all your possible debt solutions.

Do I have to pay for this service, or any other costs? Do I have to pay for this service, or any other costs? We don't charge you any fees since these are agreed with and paid by your creditors as part of the IVA. Providing you keep to the agreement, any debt you can't afford to pay will be written off by your creditors at the end, and there is nothing further to pay.

How long does it take to set up? How long does it take to set up? An IVA can take as little as six weeks to set up. The quicker you provide the information required, the quicker we can sort things out.

What type of person enters into an IVA? What type of person enters into an IVA? Simply people who cannot afford to repay their debts. You would be surprised how many people are in this situation, from all walks of life and all occupations. You are certainly not alone, and it’s nothing to be embarrassed about.

Will any of my creditors continue to chase me for payments? Will any of my creditors continue to chase me for payments? Right from the start we will contact your creditors and confirm you are taking advice from us. If more than 75% of them approve your IVA proposal, then ALL of your creditors are bound by its terms, meaning none of them can chase you for anymore payments.

What is an SIVA? What is an SIVA? Simple Individual Voluntary Arrangements (SIVAs) are planned to be introduced in 2008, and are intended to simplify the whole IVA process. Due to increasing levels of debt in the UK there has been a dramatic rise in the number of people applying for IVAs. This has led the government to review the system nationally and introduce SIVAs. Currently an IVA can only be agreed if it is approved by creditors representing 75% of the total debt owed. Under the SIVA scheme this would be reduced to 51% for applicants who owe in excess of £25,000. In addition a simpler application process and agreement will be implemented, which should ultimately help more people become debt free as quickly and easily as possible.